Equipment with a cost of $225,000 has an estimated salvage value of $15,000 and an estimated life of 4 years or 10,000 hours. It is to be depreciated by the straight-line method. What is the amount of depreciation for the first full year, during which the equipment was used 2,700 hours? a. $56,250. b. $52,500. c. $56,700. d. $54,375.

Question

Luz Greer

Business

3 January, 14:39

Equipment with a cost of $225,000 has an estimated salvage value of $15,000 and an estimated life of 4 years or 10,000 hours. It is to be depreciated by the straight-line method. What is the amount of depreciation for the first full year, during which the equipment was used 2,700 hours? a. $56,250. b. $52,500. c. $56,700. d. $54,375.

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Answers (1)

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Fisher Woodward · Answer 1

Answer: The answer is $52,500

Explanation:

Cost - salvage value/useful life

Cost=$225,000, salvage value=$15,000, useful life=4years

= 225,000-15,000/4

=210,000/4

= 52,500

Therefore the yearly depreciation of the equipment is $52,500